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tv   Book TV After Words  CSPAN  February 3, 2013 11:00am-12:00pm EST

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book "pound foolish" the end of the former author of the "l.a. times" money makeover series goes inside the world of personal finance gurus and reveals how the products and services they promote often undercut the financial security of those using them. this is about an hour. >> host: i enjoyed your book quite a bit. >> guest: thank you so much. >> host: i look for to discussing it. it was a very pleasurable read. very easy to read. and i was caught by the subtitle, exposing the dark side of a personal finance industry, which later in the book you called the personal finance and is a complex, which includes not a investment banks and brokers and financial planners, but also the financial media. seminar leaders, newsletter publishers. even include yourself in that, as a former columnist for the "l.a. times." you did their money makeover
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column. you include yourself as part of this complex, and you point out i think with some guilt that you are responsible for giving people an illusion of control. you talk about that throughout the book the what do you mean by that? >> guest: i'm going to backtrack. personal-finance starts in the 1930s with sylvia porter. and it's really a spinoff at of the self-help business of the 1930s to the 1930s are known for everything from hard economic times of the 1930s. easy everything from alcoholics anonymous to go in the 1930s the napoleon, giving people rich, a very socialist activist movements, fascism and communism. and there's a whole fulcrum going on. sylvia porter developed personal-finance out as over a period of years. and her goal is to educate people so that this great depression would never happen again. but it's very much in the way an idea that we can teach people
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certain skills. and if they learn the skills we will all be okay. but what goes on overtime is personal-finance slowly becomes severed, to a great extent from them. so it becomes less about the political backbone of it, which is always to be fair to sylvia porter for good part of her career a huge part of the things. she was a devout keynesian for example. and come simply a list of tips. it becomes in a way like any other form of self-help, be it how it to toilet train your toddler, follow these 10 steps and all will be okay. and if you don't follow these 10 steps, it won't be okay. and, therefore, if he did follow these 10 steps, it has to of worked out. and if it didn't work out, then you didn't follow these 10 steps. it's all on you. another prepared of years what happened to starting to happen with a personal-finance. >> host: do you see the same fellow i saw between maybe
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financial media and fashion media, typically if you don't look like this or this, you're an anorexic models are something wrong with you? if you don't look like this, saving hundred thousand year and getting 25% return, you can retire by age 42, there's something wrong with you. >> guest: i hadn't thought of it that way until you mentioned it but it is perfect in a way because of course she isn't sitting in her office think i'm going to put this 90-pound 5'10" perfect woman in and makes an teenager in des moines feel terrible about their life. is not what she's trying to do. but, in fact, there is a parallel. we do showcase often these either perfect people have done things perfectly, and how boneheaded and things perfectly, they experienced no ill fortune which is another huge part of them. and the same thing can be said, you know, most people still have the ability to achieve this. this. they don't kind of write about money to provide the ability to save the right amount of money.
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they have the fortunes have not had a good time. and so on down the line. most of us are not financial equivalents of 90-pound 5'10" models. >> host: do. you also mentioned a generation or two ago you didn't have the same concerns we have today. i think you mentioned two-thirds of people 30 years ago had fixed pensions provided by their employers. and that two-thirds of us at best have access to 401(k)s. in other words, employee spotted rather an employer sponsored retirement plans. and they were not working, with a? >> guest: know. i want to go to one of the thinkers began to our financial lives are so complicated. i was born in the mid-1960. credit card for less than 10 yourself. a married woman had no right to a credit card for the idea of be expected to know much about my credit card would be absurd. there was no adjustable-rate mortgages. there were no atm machines.
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there were no retirement accounts. this whole structure that we now take for granted simply didn't exist. and so we were expected, the retirement becomes this issue where in the late 1970s, first the individual retirement account debuts, which is she now is simply a supplement for sosa security. it will help people save a couple thousand dollars a year for. and then followed by the 401(k) which is a historic accident. you want me to talk about that? so the 401(k), there is a concern among executives at kodak, and a few other companies, they want to go to get salaries tax deferred come high earners were talking about. and somebody goes to congress and then eventually there's this little code put into the tax in the late 1970 called the 401(k). these high-end executives get the right to put some of the money aside on a tax-deferred
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basis. no one thinks he think about this, except for one man, an attorney. and he sees that one should just be high-end executives? issued to all of us. he gets the reagan administration did agree with his viewpoint. this takes place by the time, early 1980s, then the next part which almost nobody foresaw is the idea that, wait a minute, you don't have to get people in pensions, to request the 401(k)s are really a good substitute for pensions. this is where the corporate cost cutters start creeping in and they said if you're going to match 3% to 6%, it's a lot cheaper than funding of pension. and besides, a lot of people won't sign up anyway so don't worry about the 6%. so and should over a period of many years, the numbers drift down to where we are today. >> host: this is all happening while the stock market was raging through the '80s and '90s and people thought they were forever going to get 20,
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25% returned to your. >> guest: that's the other part. the might of been more opposition except for the fact the stock market doubles, doubles again and doubles again, and doubles again in the period between 1982, and to deny your accounting, 2000 over 2007. so people think, begin to think that this is a natural order of things. gallup poll in the late 1990s what people expected 30% average annual returns. not one year, but every year. people, we all have a bias towards the recent past as we all know. and so people just saw this almost as a guaranteed investment scheme. but to be fair that's also how it was pitched at them. you can see. you going to things like money magazine and the other financials at the time, and the 401(k) is, someone row, the little engine that could. just keep putting their money away and you're going to be
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find. >> host: now most people feel they will retire destitute. >> guest: surveys show repeatedly 80% of us think the 401(k) is an absolute failure. at the same time they show that we don't want to give but if it which is fascinating. the only thing i can think of is that of course everybody likes to get their money, but second, when you have real social things come when things that amuse always really interesting is that when it is completed forget how it once was. i will give you the example of when i tell people that they made woman had no right to credit card the of sport, icy jaws drop open and that's what people who work in finance industry. people just can't even conceive that world anymore. yet it was 40 years ago. it was less than 40 years ago. i think the same thing is true of the retirement universe. we don't see any longer how it once was. the people who have pensions are slowly but surely dying off. and one of the things in the
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post 2083 was that you would think we always say let's get ourselves pensions again. and effect survey data show we do on pensions. people are saying that. but our real response is up and organize to get ourselves into and. the real response has been to try to get attention away from the last people who have been. what are people like the auto workers union, teachers, government workers. we are not saying we want that. we are saying let's get theirs. >> host: we have now this personal finance industry complex, allegedly seeking to help, help us with all of the complexity. and as you point out in the book, that health is dubious at best. can you introduce the standard of the term fiduciary standard what you talk about how important for people to understand what that term means, if you do. would you explain to us what fiduciary standard means, why it's important on why you should know what it means reqs. >> guest: right.
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i should say two-thirds of us have no clue. the fiduciary standard is the idea that somebody who is getting a financial crisis going to ask in your best interest. in fact, the vast majority of people who call themselves advisors are really salesmen who have a duty and to do something called the stated billy -- suitability stand. the way i was like to describe is to say you're going to a store, you're buying. if you go to the store where they will study the suit and if the dishes get that it would have to fit with well. the caller would have to be flattered. if it needed adjustments you would need to find a tailor easily and the tailor cannot be very expensive and would have to be suitable for the occasion you are using it for. if you went to a store that was under the suitability standard, this it can just be kind of
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okay. the tailor could be a crosstown and the most expensive one around. and it might just look all right at your function but it might not be really flattering for you. maybe it makes you look to tv or something. at the same time, and, of course, most of us go to the store quite aware of the fact that -- a just for. but when i go for financial products we have no clue. of course, was more important? >> host: when you look for a financial professional, usually you see an alphabet soup after the name. how do you know whether a financial professional is operating with the judiciary standard, looking out for my best interest, or nearly the suitability stand? >> guest: you ask. you have to ask. you have to ask. i mean, i don't have anybody to look at -- there's certain things if somebody --
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>> host: national association -- >> guest: i'm blind. host a personal financial advisors. >> guest: they've had their scandals, too. but for the most part one of the things that goes on in this industry is people don't ask questions. often get to the quote advisors by cannot wait until jet research, but they got the country club like bernie madoff or cousin bob's best friend or my next-door neighbor or someone who came and presented at my children's school. so people are discouraged from asking questions because people come at you as though they are your friends. and, of course, we don't can ask our friends hard questions. how are you acting in my best interest. are you working with the judiciary standard? >> host: a lot of people need financial professionals through free district is there anything
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wrong with getting a free steak and a glass of pinot noir in exchange for sitting through a sales skill quest to advise even going in the first place? >> guest: apparently gave an interview that reuters, if there's one thing i could ban it would be the free new. free meal, it's so harmless, right? you're going to get a nice steak. you ge did a good lobster. you don't have to buy anything. well, people who sell my shares will tell you this isn't going to end well for you. the problem is our defenses are down when we eat. we know this. and these people can be very appealing. and i'm going to explain why, is there's a whole apparatus that teaches how to be appealing. the art techniques where they are told to write to people. usually people are written to. you sometimes get enough but most of because still dealing with the over 65 that it's mostly still spelled out.
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and use only a hot button issue, social security, outliving your savings, ill health in old age, protecting your money from your children. that occasionally comes up. and then you are going to scare them. make them afraid this is going to happen. and then things yo just us all. and, of course, you don't want pashtun you don't say what the solve this. and then when you come into the presentation, and i have sat through several of these over time, though i have to say i'm more scared that my presence is changing the presentation slightly because i don't look like a demo yet. i'm not old enough i don't look like an over 65. i look like someone's angry daughter there to protect them. but i try. the shield often is, and i seems, social security is going to be cut. your taxes are going to be raised. you have a two-thirds chance of
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not letting your retirement savings. they present their solutions. now, their solution is often something that is a high commission product, like a veritable annuity. and all i can say about the new is the are some good ones, some not so good with. but chances are if they are being presented at a free lunch of again, they are not the ones you want. and these are things that come with extremely high cost faces going on, and word of advice, you can't get you out of them without severe difficulty. and the stories of people being sold inappropriate investments, you can go do a google search and again to you, you will find hundreds of stuff like on one page. >> host: you didn't say anything about the quality of the new. a good steak at least? aspect apparently the advice is, is to give that the food when, after the presentation.
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and partly so people aren't listening to you over clanking force, in part because they're not distracted. that my experience was it left a lot of hungry people. so i am sitting there waiting and waiting and waiting there and they kept saying oh, the kitchen is delayed. the kitchen is delayed. the kitchen is delayed. and the salmon was fun to i wouldn't describe it as four-star. there's a whole third of what kind of restaurant you should go to come and it should be a good restaurant. it's not low wind. nobody is taking you to chipotle, but on the other hand, it's not going to be too high and. chances are it's not going to be the palm. and then there are things about the different types of food. one person i interviewed for the book told me that a guy named george, he said never do italian. this scene is a delicate stomachs and you will lose half of them. >> host: you mentioned the word commission, and i think a lot of people don't know how their financial advisors are
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being remembered. talk a little bit about -- they hold payment structure in the financial industry. you mentioned somewhat askew in the book. >> guest: i joke that these people conduct themselves as financial saviors and their all too often picking your pocket. but the way commission works is, like you go to a financial advisor, there's one of three ways. you can either paid by the hour, you can pay a percent of management, or you can pay a commission. the first to think pretty self-explanatory. commission is again actually pretty self-explanatory. it is what, you know, a percentage of the sale. the problem with the model is of course people are given different commissions for what they sell. there are incentives to sell to associate things. often the best financial products for people, low-cost mutual funds like safer
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vanguard, do not come with high commissions. in fact, they rarely come with any sort of commission if ever. so as a result what is extolled people is not exactly a really great deal for them. but they don't know that. and again, the reason they don't do that is because it is almost next to unheard of for somebody selling at a commission working with producer standards so that worked with somebody who has her best interests at heart. we've seen any number of scans over the years with this. the new york times reported on what a few months ago this was going to press and i managed to get a sense that jpmorgan chase, the bank, was telling people the very high c. manage mutual funds that which is not doing very well and costing a fortune for the customers in them. you know, thanks see these people, they don't see them as people getting to be held. they see them as revenue streams, frankly. >> host: you don't often know
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what the commission is either, do you? >> guest: not unless you ask. there's no law that says this stuff has to be represent anything. so you've got these mailers our big papers presented to you, 20 pages in teeny teeny tiny type, single spaced. most people overseas our artery that without their reading glasses anyway. who is reading it anyway, right? i'm not reading it. are you reading it? you might be. that's what you get for living. but nobody does. the survey data shows, takin det on the survey, two-thirds to 90% of don't even know how that person is being paid which tells you right there that you're being charged a commission because of course if you're paying them by the hour, chances are incredible you would no. >> host: since 2008 there's been a lot of talk about regulatory missions to cancer in been anything positive in last few years to help consumers? >> guest: the consumer
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protection board has done some death -- some decent stuff. how long it will take you to pay off your credit card. how lately that doesn't seem to help anybody. this is one of the problems you have with disclosure. people are big on the credit card that if you pay the minimum it will take you two years, 10 years, whatever. they are going okay, instead of saying, i should look at that as an incentive to pay it off sooner. so you are saying that. i think you're seeing more people at least question the system. unfortunately, sometimes that question gets people to pull out of stock market altogether, as we know the figures from last year almost come with exception of maybe six weeks left you, more people's money was out of the stock market and put him. that might be a good response for people who are elderly and can't afford to take chances anymore, but we know that's not all of the people. >> host: one of my favorite sections of the book is where
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you talk about the money show, the annual event seaman, i can carnival in orlando. i'm not sure i want to go or not. >> guest: you must. i don't everybody who writes about finance they hav had to gt least once so they know how much americans are really thinking about money. >> host: okay. i look forward to meeting eric, oliver, a day treating who grew handling $8000 two-day seminar designed to teach anyone to beat the market. he tells the crowd he almost never makes a bad trait to a lot of people say can you tell us about some of your losers? and i said, quote know, i have been. i almost had a losing trade in 2010, but it was more of a breakeven. then h you have a sense a few pages later that i just love, where you say it's up to you, meaning the consumer, to ask the salesman why if there are tools and investors are so good they are breaking a sweat trying to sell the stuff to you and me, not trading it from a yacht on a
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tax-free seas off the cayman islands. few people did ask these questions. are we really as gullible as that? >> guest: a lot of people are. to be fair, you know, what i found was that a lot of, there's some but there's also a lot of desperation of the. people retire. people are 55 and older. it's very unusual to see anybody there under the age of 55. people are really scared. what i've done over and over again were middle managers who had been let go from their jobs as one person told me he was just sick of the crappy consulting gig, and he figured hey, i can do better than whoever is out there. and this is what it is preying on. it's not like the daytraders of the 1990s, who really were just greedy and were just trying to make a go of it. these are people who see that their brokers or whomever their
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advisers are going nowhere. interest rates on savings accounts and bonds have been zero, or next to zero for years out with no end in sight. this is an incredibly scary environment for people. and things like the money show are holding themselves out, come this way, or healthy. they're doing something else that's very distressing, which is we'll know financial smart -- we tend to be less damaging as we get older. on the plus side, that's why people report being happier in life than us in middle age. on the other hand, is one of the many reasons why they are a little bit more gullible. or some of them are. obviously, not everybody is. but there's a lack of question. the third part is there's been a concerted effort to sell us all the stuff. for really since the 1970s i
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would argue, but it's gotten more and more extreme with each passing you. and is given legitimacy. you pick up "fortune" magazine and there's 10 stocks to select. which i always love 2007 they picked aig and they said is no enron. which i said that's actually true, the government did not bail out enron. you know, the nbc, legitimacy in this town. so to a lot of people, again most people are not that financial savvy. and so they come to money show and it looks great but the thing is of course these people are persuasive. people do, nobody is walking around with signs saying don't trust a word i'm saying. and these people tell them, this is what they believe and are the going to try these products and see what happens. and i spoke to people. i spoke to one person, he told he lost a couple hundred thousand dollars during the do
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tcom boom, an elderly guy. and i said to what lesson did you take from that? and he said stoploss orders. you know, and you don't know what to say at a certain point. i wish is imagine his children at home ripping their hair out or something. >> host: stop loss order means if the price drops your out of the game but that will not serve for protection? >> guest: that's not very conservative. it was one thing on the money show on the forget, there was one that said seniors, don't earn a crappy 2% at your bank. this was 2010 or 2011. now it's even lower. we can get 40% a year. i couldn't -- you don't know what to say. >> host: you point out that the house flipping seminars are particularly obnoxious and counting, and people lose a bundle typically in that. what makes somebody think without any experience in real
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estate that you just flip houses? >> guest: one of the things, and want to backtrack, the money show gets this unwelcome gurus and the house people get this, when you deal with people like dave ramsey, a lot of it is about sacrifice and building money slowly. and cutting back, and if you are of lower income status, and to deal with this. don't go to the moody's. don't have a smartphone. the thing about a lot of these wealthy roots, and you can call all these people wealthy roots, is they kind of get one basic thing about us. they get we need more money. i should say we do need more money. our network -- met with plunged. salaries have been falling for decades. we do need more modesty. but instead of saying we need to cut back or you need to accept her fate, they're holding out a solution for us. and they're going to lead the way.
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tsi telling you to give up your daily trip to starbucks. he's telling you to buy the ground underneath a starbucks so you can afford to buy as many copies as you would like. so that's part of the problem. the other part of the appeal is once again, this was sold to us. it's very easy to doubt that you should've known better. you don't buy a house you can't afford. but if you picked up a reputable magazine in 2005, like say, money magazine, this was presented as a perfectly legitimate strategy. people were not doubting it. you have to go online to find a guy who believe in, 10 people had heard of in 200 2000 i to understand that maybe this wasn't such a good idea. on a day-to-day basis, we were seeing reputable people promoting this strategy. david spock who got famous for the fact ahead to do with wells fargo he was promoted and he
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said, he went on 2020 and he helped a young couple, you know, who had next to no money by a house with no money down. and it was come and actually identify there he was the guy, he identified their factor which was video games and kids toys, and i think the mother did some pageant work with the group or they are now renting out of the house. poor people had to move. they managed to keep the house the. but this was being promoted as legitimate. we are now turning around and blaming people for it. >> host: we need to take a short break and i'm going to is just we go out and get coffee and come back. i look forward to talk about the rest of your book been. guesstimate okay. -- >> guest: okay.
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>> visit and click podcast on the upper left side of the page. select which podcast you would like to download and listen to "after words" while you travel. >> host: helaine, we're talking during the break about some products, financial products that are so bad, so bad, no one, probably no one should be looking at them. variable annuities in particular. a variable annuity is a financial product that offers you a future income stream but anything could happen between now and then. and i've never met anybody who could read one of these contracts and really understand, including me, i will admit it. they are long. they are sticky, and you were saying you believe even ensures themselves don't understand these. ..
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so the insurance companies could get them back. that should tell you everything need to know about that project because they don't understand how on earth are you going to understand it? host producer so that each commission. >> guest: the equity indexed annuities are set on higher commissions. the rest of the subject of the free lunches and dinners we suggest. when you look at sales literature or the salesman, not
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for you, it's extraordinary. cruises century and exotic locales if you can sallow and the reason they're giving these things is because they are hard see how and they probably shouldn't be in that case. by the way, good rule of financial time. if you don't understand it, don't get involved in it. very basic. this sales materials were extraordinary when i saw it then. i couldn't believe it. >> host: before the break we were talking about lability, but at one point in the book you were sorely tempted to try to take what matt money jim cramer says into the exact opposite. i'm not sure if you're kidding or not. >> guest: if i didn't have small kids i might've tried it out for a month or two.
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the university of dayton actually ran all his pics from various times through computer simulation and found the best thing you can do a short anything. there were some corollaries to this. the smaller the company, the more likely it would work. it's a lot harder to move idea, but then some company like boxes irs. host to let me point out that mean strategy traders use to make money off of stuff based income. >> guest: bright. there's various theories of thing saturday colina. they walked away beyond that, but he has a huge following. people really like him. he makes that look like a lot of fun. i watched the show i have to confess. i want to turn it off in about
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30 seconds. this is a screaming man and why would anyone want to scream? but apparently this is really quite entertaining. he can make it seem very down to earth, but the average person isn't going to monitor stocks the way they need to. they're not going to do it. people have told me over and over again, stories of investing based on stock from jim cramer. but if you ask to be fair to jim cramer, if you asked them, a lot of people thought they could hold on to stop. which is what his specialty was. so it's really not a great fit. the nbc is making money promoting it. >> host: if you point out jim cramer performance results in
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google and check on a number of numerous studies showing very unimpressive results to his scheme. so i agree with you. episcopate make money coming to the fsa. set that matter as you point out to the book we might go up to sit the advice dave ramsey or suzy orman who people rapier. at the sum total, media is hurting us more than helping us. why? >> guest: for the past several years, a lot of us feel like we've let turkey in sandy. but a lot of people are doing are saying hey, put up a few sandbags, here's an umbrella. do as i say it will be fine. they're the ones telling you the umbrella of the sandbags to make you sign. >> host: could you be specific? >> guest: suzy orman has said she would not go to the stock market herself, set up at the
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money navigator with a small mutual fund investor who is getting amazing results. one of the reasons he was getting amazing results was because he had a typographical error and had misstated some return numbers of the indexes. it's a lot easier to get great results when you do that. so she was doing that. dave ramsey has told people to this day if they can expect 12% average annual returns an american to be fair they did get that 2012, but that was one year. that's not a number people about forgotten on any consistent basis. the other thing he said which i find amazingly hurtful is he urging people not to declare bankruptcy. this is an import point to talk about. bankruptcy exists for a reason. you might not like it. despite what people think, the
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united states is not full of people running up credit cards to bankruptcy courts. the united states is full of people who live in a curtain society who get stuck with you childcare expenses, lose their jobs, families or part. they start small businesses, and other huge source of that. we have evidence to show people to start small businesses end up in bankruptcy court for often the people of regular corporate jobs. so when i look at this, i spoke to people who have put out a request and i was looking for success stories and i talked i talked to people he said they take out some of their debts. i found people who in one case on somebody who is hundreds of thousands of dollars in debt. he was an airline pilot earning birdie would have earned. most of his that came from and home renovation and then he and
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his wife tried to better their position. they started a small business. what happened is they ended up with more debt. or try not to interject yourself. you're trying to be a reporter. i think i finally sent from the one that you declare bankruptcy? he said dave says not to. i couldn't believe it would really help this person to not declare bankruptcy. he was never going to take out of this. or he was going to so damage his future retirement prospects, children college and the rest that it would have been worth it. the idea of this one-size-fits-all ice doesn't work for very many people. >> host: you point to the highest level of bankruptcy and as elizabeth warren who did a study on more than half of all
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bankruptcies are caused by medical costs. rising medical costs are one of a number of reasons that americans are not saving any talk about a number of other reasons. you say that the financial journalists out there or by and large telling us it's our fault, but it's really not. discuss that. >> host: puncturing >> guest: we all see people spending too much money so we assume this is a colina. run fifth avenue. walk out the door and see people carrying shopping bugs. what's going on as we look at the survey data between half and two thirds of people routinely say they cannot save money. they are living paycheck to paycheck. i felt ready to turn this problem on its head. i refuse to believe how 22 thirds is routinely lying to pollsters about what they're up to. i can't bring myself to believe that one. when you look at it, and
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elizabeth moore in house, the goddess of the source for statistics, what has happened is their salaries that needed intel. men under the age of 45 pretty much to matter what their dad did. harder to judge because of societal changes. two income houses are not where one in come houses for several decades ago and one has,, however, education has quadrupled over the past couple decades. health care has, for decades. housing as we all know famously took off in major cities still skyrocketing as people in glass houses. the cost of having children has increased and has continued to in greece to the entire poster destiny. as other things have stagnated. so the things people cannot get themselves out of have gone up
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considerably. the things that are declined by the things we identify as luxury. it is to take over week of work to buy a television set. now it's barely a day. closing used to be much more expensive. next to the fact it comes to the third world, it's very cheap. our issue is the things you can't get away from. i joke in the book i did my own experience, not deliberately, my husband and i decided we had to cut our expense is we proudly go through and really cuts it for "the new york times." we are reading it online anyways. we are going to cut it out. so we canceled "the new york times." we literally are proud of ourselves for two weeks because this is a $50 a month expense. we then get them about their health insurance is going up by $100 a month and is going to pay for less on top of that. so i supposed to be $50 a head,
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i'm no $50 behind and then found and the final kicker was "the new york times" turned around and said stop free web access and were both writers. i need "the new york times." and i like it. i felt very guilty to witness the first place and that was the end of it. but you can't cut "the new york times" every year. that's the point. there's only so much you can cut at a certain point. >> host: you should go to more free state dinners. >> guest: except i would then sign up for annuity. this free dinners cost, too. >> host: you talk about hawkers focusing on women complain that the stereotype that women are helpless and hopeless about money and you take strong issue with that. >> guest: i do. i manage money in my own house, but there's this whole idea that
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women can't manage funds because they're too emotional, too nice. we think too nice about it, which i would say howdy to graduate junior high school in think about that oblivion. when government advisers have been in my teaching like a gene for strategic and logical thinking, which i thought was hysterical. but we can't do it and we need help and there's the financial services industry. as it turns out, basic economic fact, women have less money because they live longer than men and they have more responsibilities than men. so there's three problems right there. so a lot of this top is not acknowledging reality. second, what the financial industry knows that you probably don't know and all these women
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don't notice them and men are more likely to turn to the financial services industry for days. decided the way men never ask directions and women always asked directions. so you're more likely to get a female client. so they end up pitching this idea that they can help women. but a lot of the advice would you start looking on the become so started during school thing i've save more money because they will be fair to their credit. the past couple of years, women do live longer, do have these issues, but then the responses women should save more money. the type the old and richard sine. backwards and high heeled shoes. have you saved our money if you're earning less than yet more responsibilities? it doesn't make a lot of sense. i found this was across the
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board one of the things they really distressed me as i was looking at the website, which pitches itself as a way for twentysomething women to get learn about money. sometimes their analogies are really fun and i sometimes enjoy reading it. do you remember the thing that went around a while ago about what women and men say about me and was very funny except for the fact is all about shopping and it didn't mention once one of the reasons people were having money was because the guy at the next desk was earning more than they were. how could they do this? >> host: i've seen studies, more than one, that women are better investors. they likely turned their portfolios to earn a 50% and wind up losing 50%.
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could you give examples of how the personal finance industry is capitalizing on the stereotype? >> guest: they try to portray women as more risk averse when in fact the evidence we have in some of this is steady work that came out after the book went to print the differences are not as extreme as portrayed under seem to have a lot to do with the fact of who's earning well. the more people are in this probably won't come as a shock, the more likely they are to take risk with money. the more likely it's because they think they can earn it back if it goes wrong. women don't tend to have that certainty men do. instead of being told that's what's going on from the financial industry says women are taking enough risks. one of the other things i did find interesting was when they intend to admit ignorance more.
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again, this is another thing it comes out. both sexes don't know enough about finances. women love slightly less, but it's not like his men here and women are there. and so, they tend to be, as a result, somewhat less susceptible to fraud issues, which is really interesting. the best reason i could guess that his win in ask questions because women understand how ignorant they are. they actually say what are you doing with men who are very socialist to pretend they're confident when they're not are not as likely to do that. as they put it, it's hard to knock women. the few women i saw were almost always just the way for husband. options trading, teams that are
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day trading. by which you want to encourage anybody to be part of them? postcode you talk about financial literacy, illiteracy. in the last several years has been a large movement to teach people financial literacy. the section of the book you talk about that was an eye-opener for me. you conclude financial literacy classes don't work and you strongly insinuated they receive and evil motives in the giving of these classes. talk about that. >> guest: when i wrote the book proposal, one of the things you do is classes and financial literacy. so i then start to research it for the book and the next thing and looking at it, like wait a second. people have been putting these in schools for 15 years, 20 years now. nobody seems to know anyway to make make it before you get such
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a show that students who took a class are no more literate students who didn't take a class. there's probably a lot of reasons. for starters, as i would say cannot identify the french and indian war and simulates a report to the american revolution. since the idea you would be out of take a class in high school and 20 years later understand adjustable-rate or cage was not your best interest that might not have existed when he took this class, probably not the best strategy. but then something else there is to creep in and what are they teaching. a lot of classes are supported by the financial services industry. the financial services industry is really what's behind the push for financial literacy. fetish illiteracy is a concept out there for quite some time, but impact it really takes off
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to the mid-1990s as a result of a group called jumpstart, which is really a bunch of corporate interests who are trying to promote the idea of fiscal responsibility. and who's behind it? if people like rain from america, a company that brought countrywide mortgage. not exactly a financially literary move. capital one is a company that is notorious for going after lower income people, doing things like going after people who cut their debt discharged, bankruptcy court entrenches to get them to pay. >> host: you're suggesting an ulterior motive. >> guest: they think they're
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well-intentioned. it would be simple to make products people understood and not to engage about financial behavior. you don't have to give people credit card terms, so why would you do a? why would you insist on financial literacy? the cynical answer is well, there's a lot of money to be made by insisting people be financial he literate and by changing the last of these things can happen for simply making products people understand. it looks good and there's one other tiny part suggested to me that there's a brand awareness component. this is not something that occurred naturally. studies show children can remember things like these as early as 18 and they will be more likely to respond favorably decades into the future as a result. there's a certain amount of getting your name out there and
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so many tools are really sponsored by various banks and their names are emblazoned on them. reagan then home and letting parents see the name emblazoned on the staff said they think the mortgage miscoded first bank for financial literacy. >> host: with mcdonald's teaching good nutrition. >> guest: is still going to be emblazoned with the name mcdonald from the top of the paper. >> host: what is the upshot we can do with personal finance industry complex. how do we keep money out of the hands of people who want to get hands on her money? >> guest: thirsty ways. first come the small answer is you have to ask questions constantly. the second answer essay at the end end of the book, we need to start talking about this.
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there's a huge culture of shame but the result we all feel are supposed to retire millionaires and if we mess this up, it was our fault. nevermind the fact the vast majority don't retire millionaires. we need to start sharing our stories and talking about this so that there is protection. we like to think there was this golden age of responsibility in the 1950s and 60s and even the 70s when the savings rate was higher. what we had was a less complex universe and a lot of protection and a good social safety net, by the way. all of that has slowly but surely been whittled away. we are protected from them last in the social safety net isn't there. but in spite of a government and family. families used to be, too. 70 to start asking the next steps we can take so that they
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are done so that they hope people because i can guarantee you that i can figure and you can sit here and ask questions, ask questions, questions. the secondary going to be ways around it. the love of complexity is so extraordinary that most people will never get their way around and. >> host: what do we tell our children going to school every day and having it be the lead seminar on learning good credit habits? >> guest: don't give them a credit card. the new thing now is to get children's allowance on prepaid debit cards. i've had arguments with people about this. i think it's one of the worst ideas i've ever heard pickett is getting kids used to the idea of using credit. even though it's not technically credit, it's the idea of whipping out the plastic. cash is fine. model behavior, try to model
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behavior. the other thing about financial literacy as people set their with smart songs and tell other people not to smartphones and parents need relearned financial literacy. they're probably going to learn in the home faster than in the class. model good behavior. >> host: we only have a few minutes left. where are you going from here? are you going to bed at about? is there something you didn't have the room or time to cover misspoke? what it needs to revealed? >> guest: i don't know. i keep saying they need to get to the next four-week series. but there's stuff i wasn't able to get into the book. i was really intrigued by one of the things that financial industry is doing the now as people do these navigating on issues to do sharing, everybody
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is trying to prove people that have wealth. very few people want to help the little guy. there are people who do. but if you go to the seminars i know i don't have to tell you this. there's first of all not that many of them. and thank you, they're just the financial services industry to help them. it's really appalling. people really need help out there. they're just not getting it. >> host: helaine, thank you for reading this book. i appreciate it very much. >> guest: thank you.
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>> host: we are here with jeff himmelman. tell me how you got to write this book about ben bradlee. >> i used to work for bob woodward and bob introduced me to bed. there's appeared prepared to write a final book is going to help them in the process to give me access to his whole archive
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and they were immensely fascinating. he decided he didn't honor another book. i asked him, how will about this stuff, can i go ahead and write it? he said go ahead. in the course of the reporting, and covered interesting stuff like what lenin. >> how would you describe him if he were to walk into this room right now? >> if you were to walk in this room right now, you'd want to hang out with him. i would want to hang out with him. the majority of the women would hang out with them. he just has a kind of a movie star charisma any sort of homes around wherever he is. one of the ways he works as an editor is a nearly had that been a lot of times it's politicians who have that and not regular folks, but he is describing how he works in the book. if you were here, to be a crowd of people and everybody would be
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the following. >> in washington is well-known, but throughout the country people about how editors as they used to. what has changed in changing ben bradlee's throw from when he was editor of the poster in the watergate scandal to today? >> guest: that's a story because what was so unique at the time as they were making judgment calls in a moment with no ability to check. some of the posters are pretty watergate, they're out there hanging on their own. they had known back in today when you break in a big story, there's so many people with it. you have everything from gawker to major media outlets. everybody's checking everybody all the time and it's hard for one outlet to go as far out on the limb is supposed to.
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because of that company editor of a newspaper has more power and control, so today with hp stories in a different pay to get the next click and be the fastest, the first, there's a little bit of a lack of differentiation. i'm not sure ben would want to be an editor today. this he a lot less challenging it for him. >> jeff himmelman is the other viewers in truth, personal portrait of ben bradlee. thank you very much. ..


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